Tuesday, February 13, 2007

Inequality of Patience

Five years later, Dr Reyes-Garcia and her colleagues came back again. They re-interviewed 100 of their volunteers (the other 51 were unavailable for one reason or another) and found that those who had shown most patience in the original experiment had also seen their incomes increase more than those of their less patient counterparts. The effect was relatively small—the incomes of the patient had grown 1% a year faster than those of the impatient. Over a lifetime, though, that adds up to a significant amount of inequality.

I don't think this is going to surprise very many economists. But, given the rhetoric of those in politics who make correcting inequalities one of their mantras, it may be a surprise to some people. When we think about public policy concerning inequality it is clear that we have to recognize that at least some inequality, and maybe a lot of inequality, is the result of different choices made by different people.